The principal divisions of the company are Industry, Energy, Healthcare (Siemens Healthineers), and Infrastructure & Cities, which represent the main activities of the company.[5][6][7] The company is a prominent maker of medical diagnostics equipment and its medical health-care division, which generates about 12 percent of the company's total sales, is its second-most profitable unit, after the industrial automation division.[8] The company is a component of the Euro Stoxx 50stock market index.[9] Siemens and its subsidiaries employ approximately 379,000 people worldwide and reported global revenue of around €83 billion in 2018 according to its earnings release.

In 1867, Werner von Siemens described a dynamo without permanent magnets. A similar system was also independently invented by Charles Wheatstone, but Siemens became the first company to build such devices. In 1881, a Siemens ACAlternator driven by a watermill was used to power the world's first electric street lighting in the town of Godalming, United Kingdom. The company continued to grow and diversified into electric trains and light bulbs. In 1887, it opened its first office in Japan.[12] In 1890, the founder retired and left running the company to his brother Carl and sons Arnold and Wilhelm.

1901 to 1933

The company built airplanes during
World War I, for example this Siemens airplane in 1926.

During the final years of World War II, numerous plants and factories in Berlin and other major cities were destroyed by Allied air raids. To prevent further losses, manufacturing was therefore moved to alternative places and regions not affected by the air war. The goal was to secure continued production of important war-related and everyday goods. According to records, Siemens was operating almost 400 alternative or relocated manufacturing plants at the end of 1944 and in early 1945.

In 1972, Siemens sued German satirist F.C. Delius for his satirical history of the company, Unsere Siemenswelt, and it was determined much of the book contained false claims although the trial itself publicized Siemens' history in Nazi Germany.[19] The company supplied electrical parts to Nazi concentration camps and death camps. The factories had poor working conditions, where malnutrition and death were common. Also, the scholarship has shown that the camp factories were created, run, and supplied by the SS, in conjunction with company officials, sometimes high-level officials.[20][21][22][23]

Siemens businessman and Nazi Party member John Rabe is, however, credited with saving many Chinese lives during the infamous Nanking Massacre. He later toured Germany lecturing on the atrocities committed by Japanese forces in Nanking.[24]

The company's first digital telephone exchange was produced in 1980. In 1988, Siemens and GEC acquired the UK defence and technology company Plessey. Plessey's holdings were split, and Siemens took over the avionics, radar and traffic control businesses—as Siemens Plessey.[26]

In 1985, Siemens bought Allis-Chalmers' interest in the partnership company Siemens-Allis (formed 1978) which supplied electrical control equipment. It was incorporated into Siemens' Energy and Automation division.[27]

In October 1991, Siemens acquired the Industrial Systems Division of Texas Instruments, Inc, based in Johnson City, Tennessee. This division was organized as Siemens Industrial Automation, Inc.,[29] and was later absorbed by Siemens Energy and Automation, Inc.

In 1992, Siemens bought out IBM's half of ROLM (Siemens had bought into ROLM five years earlier), thus creating SiemensROLM Communications; eventually dropping ROLM from the name later in the 1990s.[30]

Also in 2000, Atecs-Mannesman was acquired by Siemens,[35] The sale was finalised in April 2001 with 50% of the shares acquired, acquisition, Mannesmann VDO AG merged into Siemens Automotive forming Siemens VDO Automotive AG, Atecs Mannesmann Dematic Systems merged into Siemens Production and Logistics forming Siemens Dematic AG, Mannesmann Demag Delaval merged into the Power Generation division of Siemens AG.[36] Other parts of the company were acquired by Robert Bosch GmbH at the same time.[37] Also, Moore Products Co. of Spring House, PA USA was acquired by Siemens Energy & Automation, Inc.[38]

In 2003, Siemens acquired the flow division of Danfoss and incorporated it into the Automation and Drives division.[42] Also in 2003 Siemens acquired IndX software (realtime data organisation and presentation).[43][44] The same year in an unrelated development Siemens reopened its office in Kabul.[45] Also in 2003 agreed to buy Alstom Industrial Turbines; a manufacturer of small, medium and industrial gas turbines for €1.1 billion.[46][47] On 11 February 2003, Siemens planned to shorten phones' shelf life by bringing out annual Xelibri lines, with new devices launched as spring -summer and autumn-winter collections.[48] On 6 March 2003, the company opened an office in San Jose.[49] On 7 March 2003, the company announced that it planned to gain 10 per cent of the mainland China market for handsets.[50] On 18 March 2003, the company unveiled the latest in its series of Xelibri fashion phones.[51]

2005 and continuing: worldwide bribery scandal

In 2005 Germany opened investigations into Siemens business practices worldwide, prompted by requests from prosecutors in Italy, Liechtenstein and Switzerland; US investigators joined in 2006 and the US investigators addressed violations only since 2001, when Siemens started selling shares in a US stock exchange.[72] The investigators found that bribing officials to win contracts was standard operating procedure.[72][73] Over that time period the company paid around $1.3 billion in bribes in many countries and kept separate books to hide them.[73]

Fines were anticipated to be as high as $5 billion as the investigation unfolded.[74] Settlement negotiations took place through most of 2008 and when they were announced in December they were far less, driven in part by Siemens' cooperation, in part by the imminent change in US administrations (the Obama administration was about to take over from the Bush administration), and in part by the dependence of the US military on Siemens as a contractor.[72][74][73]

The company paid a total of about $1.6 billion, around $800 million in each of the US and Germany. This was the largest bribery fine in history, at the time. The money paid to Germany included a $270 million fine paid the year before (related to bribes in Nigeria[75]). The US payment included $450 million in fines and penalties and a forfeiture of $350 million in profits.[73] The company was also obligated to spend $1 billion on setting up and funding new internal compliance regimens.[72] Siemens pleaded guilty to violating accounting provisions of the Foreign Corrupt Practices Act; the parent company did not plead guilty to paying bribes (although its Bangladesh and Venezuela subsidiaries did[73]); such a guilty plea would have barred Siemens from contracting for the US government.[72] As the scandal had started breaking, Siemens had fired its chairman and CEO Heinrich von Pierer, and had hired its first non-German CEO. Peter Löscher; it also had appointed a US lawyer, Peter Solmssen as an independent director to its board, in charge of compliance, and had accepted oversight of Theo Waigel, a former German finance minister, as a "compliance monitor".[74] The compliance overhaul eventually entailed hiring around 500 full-time compliance personnel worldwide. Siemens also enacted a series of new anti-corruption compliance policies, including a new anti-corruption handbook, web-based tools for due diligence and compliance, a confidential communications channel for employees to report irregular business practices, and a corporate disciplinary committee to impose appropriate disciplinary measures for substantiated misconduct.[76]

The culture of bribery was old in Siemens, and led to the 1914 scandal in Japan over bribes paid by both Siemens and Vickers to Japanese naval authorities to win shipbuilding contracts.[77]

The culture of bribery had further had grown up inside Siemens after World War II as Siemens attempted to rebuild its business by competing in the developing world, where bribery is common. Until 1999 in Germany, bribes were a tax-deductible business expense, and there were no penalties for bribing foreign officials. In 1999 the OECD Anti-Bribery Convention came into effect, to which Germany was a party, and Siemens started to use off-shore accounts and other means of hiding its bribery.

As the investigation opened a midlevel executive in the telecommunications unit, Reinhard Slekaczek, was identified as a key player; Slekaczek quit Siemens in 2005 after the company required him to sign a document saying he had followed law and company policy, and turned state's evidence and led investigators to documents he had saved and to other documents. He had controlled an annual global bribery budget of $40 to $50 million. The usual method of bribery was to pay a local insider as a "contractor" who would in turn pass money to government officials; as part of the settlement Siemens disclosed that it had 2,700 such contractors worldwide. Bribes were generally around 5% of a contract's value but in very corrupt countries they could be as high as 40%. It paid the highest bribes in China, Russia, Argentina, Israel and Venezuela.[72]

$40 million in bribes in Argentina to win a $1 billion contract to make national identity cards.

$20 million in Israel for a contract to build power plants

$16 million in Venezuela for urban rail lines.

$14 million In China for medical equipment

$12.7 million in payments in Nigeria

$5 million in Bangladesh for mobile phones

$1.7 million in Iraq to Saddam Hussein and others.

The investigation led directly to several prosecutions while it was unfolding, and led to settlements with other governments and prosecution of Siemens employees and bribe recipients in various countries.

In May 2007 a German court convicted two former executives of paying about €6 million in bribes from 1999 to 2002 to help Siemens win natural gasturbine supply contracts with Enel, an Italian energy company. The contracts were valued at about €450 million. Siemens was fined €38 million.[78]

In July 2009, Siemens settled allegations of fraud by a Russian affiliate in a World Bank-funded mass transit project in Moscow by agreeing to not bid on World Bank projects for two years, not allowing the Russian affiliate to do any World Bank funded work for four years, and setting up a $100 million fund at the World Bank to fund anti-corruption activities over 15 years, over which the World Bank had veto and audit rights; this fund became the "“Siemens Integrity Initiative”.[79][80] The first payments were made out of the funds in 2010 in a tranche of $40 million.[81] A second set of projects was funded in 2014 totaling $30 million.[82]

In 2012, the Greek government settled the Greek bribery scandal for 330 million euros.[84] The trial of the persons accused of involvement in the scandal began on 24 February 2017. A total of 64 individuals are accused, both Greek and German nationals.[85] The central figure of the scandal however, ex-Siemens chief executive in Greece Michael Christoforakos, against whom European arrest warrants are pending[86][87] will likely be absent, as Germany refuses his extradition to this day. Initially arrested in Germany in 2009, the accusations against him by German courts have been dropped, and he since lives free in this country.[88][89] Greece has been demanding his extradition since 2009, and considers him a fugitive from justice.

In 2014 a former Siemens executive Andres Truppel pleaded guilty to funneling nearly $100 million in bribes to Argentine government officials to win the ID card project for Siemens.[90]

In 2014 Israeli prosecutors decreed that Siemens should pay US$42.7 million penalty and appoint an external inspector to supervise its business in Israel in exchange for state prosecutors dropping charges of securities fraud. According to the indictment, "Siemens systematically paid bribes to Israel Electric Corporation executives so they would utilize their positions in order to favor and advance the interests of Siemens".[90]

In January 2007, Siemens was fined €396 million by the European Commission for price fixing in EU electricity markets through a cartel involving 11 companies, including ABB, Alstom, Fuji Electric, Hitachi Japan, AE Power Systems, Mitsubishi Electric Corp, Schneider, Areva, Toshiba and VA Tech.[95] According to the Commission, "between 1988 and 2004, the companies rigged bids for procurement contracts, fixed prices, allocated projects to each other, shared markets and exchanged commercially important and confidential information."[95] Siemens was given the highest fine of €396 million, more than half of the total, for its alleged leadership role in the activity.

Siemens power generating wind turbine towers

In March 2007, a Siemens board member was temporarily arrested and accused of illegally financing a business-friendly labour association which competes against the union IG Metall. He has been released on bail. Offices of the labour union and of Siemens have been searched. Siemens denies any wrongdoing.[96] In April the Fixed Networks, Mobile Networks and Carrier Services divisions of Siemens merged with Nokia's Network Business Group in a 50/50 joint venture, creating a fixed and mobile network company called Nokia Siemens Networks. Nokia delayed the merger[97] due to bribery investigations against Siemens.[98] In October 2007, a court in Munich found that the company had bribed public officials in Libya, Russia, and Nigeria in return for the awarding of contracts; four former Nigerian Ministers of Communications were among those named as recipients of the payments. The company admitted to having paid the bribes and agreed to pay a fine of 201 million euros. In December 2007, the Nigerian government cancelled a contract with Siemens due to the bribery findings.[99][100]

In July 2008, Siemens AG announced a joint venture of the Enterprise Communications business with the Gores Group, renamed Unify in 2013. The Gores Group holding a majority interest of 51% stake, with Siemens AG holding a minority interest of 49%.[102]

In August 2008, Siemens Project Ventures invested $15 million in the Arava Power Company. In a press release published that month, Peter Löscher, President and CEO of Siemens AG said: “This investment is another consequential step in further strengthening our green and sustainable technologies”. Siemens now holds a 40% stake in the company. [103]

In January 2009, Siemens announced to sell its 34% stake in Framatome, complaining limited managerial influence. In March, it announced to form an alliance with Rosatom of Russia to engage in nuclear-power activities.[25]

In October 2009, Siemens signed a $418 million contract to buy Solel Solar Systems an Israeli company in the solar thermal power business.[110]

In December 2010, Siemens agreed to sell its IT Solutions and Services subsidiary for €850 million to Atos. As part of the deal, Siemens agreed to take a 15% stake in the enlarged Atos, to be held for a minimum of five years. In addition, Siemens concluded a seven-year outsourcing contract worth around €5.5 billion, under which Atos will provide managed services and systems integration to Siemens.

2011 to present

In March 2011, it was decided to list Osram on the stock market in the autumn, but CEO Peter Löscher said Siemens intended to retain a long-term interest in the company, which was already independent from the technological and managerial viewpoints.

In September 2011, Siemens, which had been responsible for constructing all 17 of Germany's existing nuclear power plants, announced that it would exit the nuclear sector following the Fukushima disaster and the subsequent changes to German energy policy. Chief executive Peter Löscher has supported the German government's planned Energiewende, its transition to renewable energy technologies, calling it a "project of the century" and saying Berlin's target of reaching 35% renewable energy sources by 2020 was feasible.[111]

In November 2012, Siemens acquired the Rail division of Invensys for £1.7 billion. In the same month, Siemens made the announcement of acquiring a privately held company, LMS International NV.[112]

In August 2013, Nokia acquired 100% of the company Nokia Siemens Networks, with a buy-out of Siemens AG, ending Siemens role in telecommunication.[113]

In August 2013, Siemens won a $966.8 million order for power plant components from oil firm Saudi Aramco, the largest bid it has ever received from the Saudi company.[114]

In 2014, Siemens plans to build a $264 million facility for making offshore wind turbines in Paull, England, as Britain's wind power rapidly expands. Siemens chose the Hull area on the east coast of England because it is close to other large offshore projects planned in coming years. The new plant is expected to begin producing turbine rotor blades in 2016. The plant and the associated service center, in Green Port Hull nearby, will employ about 1,000 workers. The facilities will serve the UK market, where the electricity that major power producers generate from wind grew by about 38 percent in 2013, representing about 6 percent of total electricity, according to government figures. There are also plans to increase Britain's wind-generating capacity at least threefold by 2020, to 14 gigawatts.[115]

In May 2014, Rolls-Royce agreed to sell its gas turbine and compressor energy business to Siemens for £1 billion.[116]

In June 2014, Siemens and Mitsubishi Heavy Industries announced their formation of joint ventures to bid for Alstom's troubled energy and transportation businesses (in locomotives, steam turbines, and aircraft engines). A rival bid by General Electric (GE) has been criticized by French government sources, who consider Alstom's operations as a "vital national interest" at a moment when the French unemployment level stands above 10% and some voters are turning towards the far-right.[117]

Products, services and contribution

Siemens offers a wide range of electrical engineering- and electronics-related products and services.[123] Its products can be broadly divided into the following categories: buildings-related products; drives, automation and industrial plant-related products; energy-related products; lighting; medical products; and transportation and logistics-related products.[123]

Siemens buildings-related products include building-automation equipment and systems; building-operations equipment and systems; building fire-safety equipment and systems; building-security equipment and systems; and low-voltage switchgear including circuit protection and distribution products.[123]

Siemens drives, automation and industrial plant-related products include motors and drives for conveyor belts; pumps and compressors; heavy duty motors and drives for rolling steel mills; compressors for oil and gas pipelines; mechanical components including gears for wind turbines and cement mills; automation equipment and systems and controls for production machinery and machine tools; and industrial plant for water processing and raw material processing.[123]

Siemens is a player in the renewable energy industry, the company provides a comprehensive portfolio of products, solutions, and services to help build and operate microgrids of any size. Siemens provide generation and distribution of electrical energy as well as monitoring and controlling of microgrids.[124] By using primarily renewable energy, microgrids reduce carbon-dioxide emissions, which is often required by government regulations. That makes Siemens especially attractive for campuses, utilities, and islands. Ventotene Island in Italy demonstrates the benefits of a microgrid in terms of sustainability. The Italian energy utility Enel Produzione SPA had a clear goal for the island of Ventotene: a stable power supply system that would operate more sustainably, economically, and reliably. And Siemens had the complete solution: The SIESTORAGE storage system, optimally combined with the Microgrid Controller. This approach included the integration of renewable energy sources to reduce the supply of diesel and to create greater sustainability. An additional goal was to perfectly coordinate all existing and new power components and, even more important, to respond quickly and reliably to grid fluctuations, ultimately guaranteeing a stable network.[124]

Siemens transportation and logistics-related products include equipment and systems for rail transportation including rail vehicles for mass transit, regional and long-distance transportation, locomotives, equipment and systems for rail electrification, central control systems, interlockings, and automated train controls; equipment and systems for road traffic including traffic detection, information and guidance; equipment and systems for airport logistics including cargo tracking and baggage handling; and equipment and systems for postal automation including letter parcel sorting.[123]

Siemens also completed a world record in 2012 for the most electricity generated by bicycles in an hour. Generating 4,630 watts in an hour in Melbourne, Australia, on December 11, 2012[127]

Operations

Siemens is incorporated in Germany and has its corporate headquarters in Munich.[128] It has operations in around 190 countries and approximately 285 production and manufacturing facilities.[128] Siemens had around 360,000 employees as of 30 September 2011.[128]

Electrification, automation and digitalization are the long-term growth fields of Siemens. In order to take full advantage of the market potential in these fields, Siemens businesses are bundled into nine divisions and healthcare as a separately managed business.

Research and development

In 2011, Siemens invested a total of €3.925 billion in research and development, equivalent to 5.3% of revenues.[128] As of 30 September 2011, Siemens had approximately 11,800 Germany-based employees engaged in research and development and approximately 16,000 in the rest of the world, of whom the majority were based in either Austria, China, Croatia, Denmark, France, India, Japan, Mexico, The Netherlands, Russia, Slovakia, Sweden, Switzerland, the United Kingdom or the United States.[128] As of 30 September 2011, Siemens held approximately 53,300 patents worldwide.[128]

Silcar was a joint venture between Siemens Ltd and Thiess Services Pty Ltd until 2013. Silcar is a 3,000 person Australian organisation providing productivity and reliability for large scale and technically complex plant assets. Services include asset management, design, construction, operations and maintenance. Silcar operates across a range of industries and essential services including power generation, electrical distribution, manufacturing, mining and telecommunications. In July 2013, Thiess took full control.[130][131][132]

Finances

For the fiscal year 2017, Siemens reported earnings of EUR€6.046 billion, with an annual revenue of EUR€83.049 billion, an increase of 4.3% over the previous fiscal cycle.[134] Siemen's shares traded at over US$58 per share, and its market capitalization was valued at US$95.3 billion in November 2018.[135]

Year

Revenuein bn. EUR€

Net incomein bn. EUR€

Total Assetsin bn. EUR€

Employees

2013

75.882

4.284

101.936

362,000

2014

71.920

5.373

104.879

357,000

2015

75.636

7.282

120.348

348,000

2016

79.644

5.450

125.717

351,000

2017

83.049

6.046

133.804

372,000

Shareholders

The company has issued 881,000,000 shares of common stock. The largest single shareholder continues to be the founding shareholder, the Siemens family, with a stake of 6.9%. 62% are held by institutional asset managers, the largest being two divisions of the world's largest asset manager BlackRock. 83.97% of the shares are considered public float, however including such strategic investors as the State of Qatar (DIC Company Ltd.) with 3.04%, the Government Pension Fund of Norway with 2.5% and Siemens AG itself with 3.04%. 19% are held by private investors, 13% by investors that are considered unidentifiable. 26% are owned by German investors, 21% by US investors, followed by the UK (11%), France (8%), Switzerland (8%) and a number of others (26%).[136]

Senior management

Chairmen of the Siemens-Schuckertwerke Managing Board (1903 to 1966)[137]